Lord Farmer: A Brexit will be a 'bright new beginning'

We are an island nation that has always depended on its trading and market skills. As such there are few areas of our national life where membership of the European Union poses such a direct risk to Britain’s future as it does in our strongest industry – financial services.

The relentless encroachment of Brussels legislation on the City is a clear example of how the European project has been systematically mis-sold ever since we joined what we were told was a Common Market.

On dishonest foundations, the EU has built a bureaucratic superstructure of undemocratic, remote institutions where we have little positive influence, and which imposes rules that directly damage our interests and chip away at our sovereignty.

Britain is arguably the global leader in this financial services industry that the world’s economy relies on and we have an unrivalled concentration of markets and trading expertise. The one where I am most involved, the London Metal Exchange, is the global pricing mechanism for base metals. It has provided substantial invisible exports for this country since it was founded in 1870.

EU regulators are endangering the sophisticated systems and culture that drive the success of London markets, which they should recognise as extraordinary assets for Europe. They even have ambitions to interfere with the common law that underpins international confidence in our system. Brussels pays no regard to our worldwide reputation for trading ethically and innovatively, a major draw for investors.

The LME, which operated smoothly and without disruption during the financial crisis, is governed by rules designed and developed over the last 150 years that are accordingly well-suited to its markets. However these are being swept away by EU diktats such as the Markets in Financial Instruments Directive II (MiFID II), which help noone and are likely only to deter people from taking responsible risk in the markets.

Britain’s global role in financial services is expanding – and yielding our Exchequer a high proportion of its tax revenues, to the benefit of the whole of the UK – but our ability to influence European rules is shrinking. Financial regulation is increasingly being pushed through using qualified majority voting over which there is no veto.

In the European Banking Authority, the double-majority lock that prevents eurozone countries caucusing against us will no longer apply once the number of EU members outside the single currency falls below five. And the Prime Minister’s renegotiation deal with Brussels earlier this year explicitly rules out a British veto on eurozone integration measures. We will be left with few means of warding off hostile regulation.

Voting to leave the EU means reclaiming control over our centuries-old parliamentary democracy, whose institutions have been such a force for good, copied far and wide.

Those who insist we should stay betray their assumption that the Brussels superstate is a more effective form of government and that we are incapable of managing our own affairs.

Once we have control, we will be able to perfect regulation for all our industries, which can only be an improvement on the EU rules that cost the economy £600m a week.

The Agency Workers Directive, for example, undermines the ability of workers like many HGV drivers to earn a living. Once they have worked for 12 weeks they have the same employment rights as those on a permanent contract so are often laid off after 11 weeks, needlessly denying them work. This directive also threatens key reforms in welfare designed to encourage people into the workplace.

By regaining control of our £350m a week membership fee, we will have more to spend on our own priorities. If we wanted to launch a sustained attack on rural problems, poor mental health and family breakdown, for example, we would be able to put more money into these causes as well as other vital areas like the NHS.

Warnings of disaster if we leave are misguided. Britain, the world’s fifth-biggest economy, should be confident that others will want to trade freely with it especially if, like the EU, they already do so. Europe has a surplus of nearly £70bn with us and no reason to put up barriers.

Nor will EU countries want to restrict their access to the London markets. Canary Wharf alone does more business than Frankfurt and we are Europe’s financial outlet to the world. Everyone benefits when London booms.

We can see the possibility now for a bright new beginning. By voting to leave, we will be taking back democracy and this will benefit everyone. By ending a decades-old deception, we will be leading the way for the continent to become more democratic and less intrusive. Brussels will moan, but I suspect the peoples of Europe will be pleased.

Lord Farmer is former Treasurer of the Conservative Part and founder of Red Kite Group